GDP Growth Reports: 2nd Qtr 1.3%; 1st Qtr Revised Downward to 0.4%

While the debt ceiling debacle continues, the fact that the economy is tanking comes into clearer view. Today's reports:

Gross domestic product rose at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than previously estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase. Household purchases, about 70 percent of the economy, climbed 0.1 percent.

But corruption still is. And it's the one thing really, to this day, that no one is seriously talking about addressing. And without taking care of that, well, let's be honest, nothing will ever change, since all the "money" will continue to simply be stolen. When crime pays the most, you get what you pay for.

When Lloyd Blankfein is sitting in a prison cell in a state of terminal anguish, when the entirety of his wealth is confiscated, and when other mafioso like him face he same consequences for their crimes, maybe we'll be on the road to fixing things. As it is, we're talking not just about bandaids on gaping wounds, but about some of the most profound wounds there are, that continue to bleed out and kill us.

Wow, the technical definition of a recession is 2 consecutive quarters of negative GDP growth. If Q1 only grew at 0.4%, then we are essentially there right now. The difference is so small it really doesn't matter.

another piss poor cycle. No matter what happens in Washington over the next 5 days, it's going to hurt the economy - the only difference is in the degree. I think some people have been fooled by unaturally high stock prices into thinking that this economy was healthier then it is. I feel like a large scale disabusing is on the way.

has a diary about Obama losing the support of independents (according to Pew).

This shift is driven by a steep drop-off in support for Obama among independents. The latest national survey by the Pew Research Center for the People & the Press, conducted July 20-24 among 1,501 adults and 1,205 registered voters finds that just 31% of independent voters want to see Obama reelected, down from 42% in May and 40% in March. Where Obama held a slim 7-point edge among independent registered voters two months ago, a generic Republican holds an 8-point edge today.

And he provides some commentary:

Dear clueless: throw out your playbook. It's f*cked. People definitely give a sh*t about the unemployment rate, even if they have a job. There's this little thing Americans like to do. It's called getting ahead. When people think they can get ahead, they go ahead and spend. If things look sh*tty, they hold back and wait. So sir, you are absolutely mistaken if you think the public doesn't pay attention to what is going on in the broader economy. They do.

I have to say, I appreciate reading the erm, "spicy" language over at DK. But I'm glad we don't really participate in that here. I know if we didn't I would probably embarrass myself. It would be bad.

Independent voters receive SS and Medicare, are boomers and have counted on receiving SS and Medicare, have relatives that receive SS, Medicare and Medicaid and wouldn't appreciate having their family members thrown out in the street or moving in with them.

Are also more likely to want change faster. If this isn't working for them, they are willing to try something new. Unlike party loyalists who would go down with the Titanic to vote for their own party only.

the Obama gang has it all wrong. My impression is the Obama team believes Independents are some group of people who make a down the middle calculation about public policy and consider cuts to Social Security, etc. as just another policy like cutting taxes for business or cutting various subsidies. IMO, they're seen as a group that's insulated and detached just like the Obama crowd that views the nation as an Excel spreadsheet instead of a social compact defined by geography.

For Independents as with everyone else, it's always the economy and talk about cutting Social Security, etc. only makes matters worse.

This is all just part of the morality play which is going on in the heads of rich people. I don't know precisely who he imagines is going to experience pain, but generally the theory is once poor people suffer a bit more for the sins of rich people everything will be ok again.

The link is to Fox's Cavuto but that seems to accurately describe the mindset of the D.C. crowd. Both Rs and Ds.

The missing piece was today's Bureau of Economic Analysis report. The expected headline was that growth had slowed, and indeed it has: The economy grew at a annual rate of just 1.3 percent in the second quarter of this year. What wasn't expected is that the BEA would go back and admit it's been overestimating growth for the past three years. "For 2007-2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously published estimates, real GDP had increased at an average annual rate of less than 0.1 percent."

As Wolfers suggests, these numbers solve the mystery in the labor market. This isn't about confidence or uncertainty or regulations or any of the other bankshot explanations we've been using to explain why unemployment seems stuck even as the economy rebounds. The economy isn't rebounding. Demand isn't returning. And without demand, there can't be jobs.

One often overlooked element of our weak economy and poor prospects is the enormous loss of manufacturing base. Even if massive spending on infrastructure suddenly occurred there are fewer good permanent jobs available. There's nowhere to go. Adequate spending would help for awhile but the long term prospects are bleak. The number to watch if spending were adequate would be the increase of the balance of trade deficit.

bill passed v. the I-don't-know-what that will get his, or some blended/hybrid version, passed would be a real contest if there were some significant ideological difference between them - but there aren't.

There's no one who gets any say who's arguing for a true Democratic position, which should be: clean debt ceiling bill, with no spending cuts and no mother-freakin' "commission" designed to do an end run around a real small-d democratic process, because - wait for it - that is not how we grow the economy and increase demand and spur hiring.

WHERE ARE THOSE VOICES?

Sorry for yelling, but there's no ideological tension that would put divergent ideas on the table, with history as a guide, to demonstrate with super-HD clarity what needs to be done.

And why is that?

Because Obama has been speaking and spouting Republican nonsense from his bully pulpit for months on end, with almost no pushback from within the Democratic caucus, and in the face of a moribund economy that is already at near-zero growth. We have had no discussion about whether we should cut, only discussion about what we should cut and by how much.

The fix, as they say, has been in for a long time, and whether Boehner does or doesn't get his bill, whether he does or doesn't look like he could be easily picked off by the oh-so-odious Eric Cantor, the only thing that really matters is that the economy is going to end up going in the wrong direction - and just as in the past, most Republicans won't vote for the final bill, so they will be positioned to absolve themselves of blame for the inevitable ugliness that's coming.

The Tea Party will fall in line if they want money next election cycle to get re-elected. The Senate will then shoot it down and the Republicans can then say "we tried". The entire fiasco, and what results from it is squarely on the Dems going into the election cycle.

Over the year, 18 states experienced statistically significant changes in
employment, all of which were increases. The largest increase occurred in Texas
(+220,000), followed by California (+157,000), Ohio (+72,400), and Illinois
(+59,000). (See table D.)"

So sure, under some metrics, the red states are better-performing states. And under other metrics, they are the worst-performing states. In any event, considering that republicans have well over half the governerships in the country, it's no surprise that some of the better performing states are going to be red states, and some of the worst. And then there is this stat:

"The West had the highest regional unemployment rate in June, 10.4 percent,
while the Northeast had the lowest rate, 8.1 percent."

I must have forgotten about that conservative stronghold in the Northeast - must be why it's doing so well.